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Exosomes are membrane-bound vesicles released by many cells including neurons, carrying cargoes involved in signaling and disease. It has been unclear whether exosomes promote intercellular signaling in vivo or serve primarily to dispose of unwanted cargo. This is because manipulations of exosome cargo expression or traffic often result in their depletion from the donor cell, making it difficult to distinguish whether these cargoes act cell-autonomously or through transcellular transfer. Exosomes arise when multivesicular endosomes fuse with the plasma membrane, releasing their intralumenal vesicles outside the cell. We show that loss of multivesicular endosome-generating ESCRT (endosomal sorting complex required for transport) machinery disrupts release of exosome cargoes from Drosophila motor neurons, without depleting them from the donor presynaptic terminal. Cargoes and autophagic vacuoles accumulate in presynaptic terminals, suggesting that compensatory autophagy follows endosome dysfunction. Surprisingly, exosome cargoes Synaptotagmin-4 (Syt4) and Evenness Interrupted (Evi) retain many of their signaling activities upon ESCRT depletion, despite being trapped in presynaptic terminals. Thus, these cargoes may not require intercellular transfer, and instead are likely to function cell autonomously in the motor neuron. Our results indicate that synaptic exosome release depends on ESCRT, and serves primarily as a proteostatic mechanism for at least some cargoes.